Friday, September 30, 2022

‘Mini-budget’: Here’s how revised taxation may affect you


ISLAMABAD: Shortly after Finance Minister Asad Umar presented the Finance Supplementary Bill (Second Amendment) 2019, or ‘mini-budget’ in the National Assembly, Federal Board of Revenue (FBR) officials broke down the speech for general public, ARY News reported.

“Three different taxes on cell phones have been clubbed into one. Now combined tax will be imposed on import of mobile phone sets,” the FBR officials said in a press briefing regarding imposition of taxes under the third finance bill.

The FBR officials said Rs400 tax will be imposed on cell phone worth Rs10,000; Rs4,000 tax will be imposed on phone set worth 28,000; Rs6,000 will be imposed on phone set worth Rs60,000; Rs8,000 on phone set worth Rs105,000; Rs23,000 on mobile phone worth Rs150,000; and Rs41,000 on phone set worth more than Rs150,000.

However, the FBR said, no tax will be charged on prepaid mobile phone cards, which meant that the customer will get Rs100 balance on Rs100 top-up.

Read More: Massive reduction in taxes, duties announced in PTI’s third finance bill

Announcing the removal of ban on non-filers to purchase cars above 1300cc, the FBR said they could now buy cars above 1300cc but with an increased tax.

The officials told that tax had been increased on non-filer’s buying a vehicle. They said tax on different cc vehicles had been raised for non-filers by Rs5,000 to Rs150,000.

“5 percent duty on import of newsprint abolished. Refund bond will be released in sales tax, while 10 percent profit on bond will be given up to three years. Fixed tax will be imposed to bring non-filers into tax net and the fixed tax will be imposed after consultation with traders,” said the FBR.

The board of revenue officials said those banks who gave loans for buying cheap houses, establishing small businesses and agriculture purpose would be given relief.

Withholding tax on remittances will be abolished and filers will be given tax relief for withdrawing money from banks. Withholding tax will be increased for non-filers by 50 percent, they added.

Overseas Pakistanis will be able to buy houses and vehicles on international passport, the board of revenue said.

The FBR officials said super tax would be abolished for non-banking sector, while it will remain imposed on banking sector.

“Duty on different medical instruments including artificial kidneys and dialysis will be cut down. Duty on raw materials for footwear, leather sector, gloves and home appliances will be reduced. The government has also announced to abolish tax on savings,” they said.

Taxes on raw materials of furniture, ceramics, diapers and sanitary items had also been slashed, the FBR officials said.

“This is the most farmer-friendly budget in Pakistan’s history. This budget has given tax relief up to Rs9 billion and imposed taxes up to Rs2 billion,” they said.

Finance Minister Asad Umar on Wednesday presented the Pakistan Tehreek Insaf (PTI) government’s third finance bill which is also the second supplementary budget by this government in the National Assembly.

Speaking in the National Assembly, Asad Umar said that it was not a budget, but a package for economic reforms. “The government wants a resolution to economic woes of the country”, he said, adding that the government didn’t want next governments to complain about previous government’s [economic] wrongdoings.

Asad Umar said that in 6 months, agricultural loans will see an increase of 22 per cent. He said that the government wanted to encourage small businesses, and if they got loans from banks, businesses would flourish.

“Hence, the government is reducing the income tax on bank loans from 39 per cent to 20 per cent. Also, banks’ income tax on agricultural loans is being reduced to 20 per cent”, he said.


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